AM Best Affirms Seguros Reservas SA Credit Rating

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MEXICO CITY–(BUSINESS WIRE)–optimal The Financial Strength Rating (FSR) of Insurance has been affirmed at A- (Excellent) and the Long-Term Issuer Credit Rating (ICR) of “a-” (Excellent) Reservas SA (Seguros Reservas) (Santo Domingo, Dominican Republic). The outlook for these credit ratings is stable.

Seguros Reservas’ ratings reflect what AM Best assesses as the strongest balance sheet strength, as well as strong operating performance, a neutral business profile and adequate comprehensive risk management (ERM).

Seguros Reservas’ balance sheet strength is supported by the strongest risk-adjusted capitalization level based on the Best Capital Adequacy Ratio (BCAR). The rating also reflects its strong operating performance, driven by sustained profitability from a diversified business portfolio, limited underwriting leverage, and the company’s affiliation with Banco de Servicios Múltiples (Banco de Reservas), the largest bank in the Dominican Republic.

These positive rating factors are partially offset by intense competition in the Dominican Republic’s insurance market, which, according to AM Best, could put pressure on Seguros Reservas’ profitability and market share, high insurance loss ratios, the company’s dividend, and the ERM framework, which could benefit from greater complexity.

Seguros Reservas underwrites both life and non-life business and is one of the leading insurance companies in the Dominican Republic, with a market share of 17.5% as of December 2023.

Fire insurance remains Seguros Reservas’ main business in 2023, accounting for 33% of total premiums, followed by motor insurance (26%) and group life insurance (12%), with the remainder (29%) in other businesses. The company has demonstrated strict underwriting capabilities in a competitive market, consistently reporting profitability, comparable to its closest competitors. In addition, financial products have remained stable, which has contributed to the positive net profit.

Seguros Reservas has the highest level of risk-adjusted capital as measured by BCAR. Adjusted capital has grown at a compound annual rate of 13.8% over the past five years, and AM Best expects this trend to continue, supported by strong underwriting, prudent dividend and investment policies, and effective cost control strategies. In addition, Seguros Reservas continues to benefit from the operational efficiencies provided by Banco de Reservas.

Positive rating action could occur due to the continued growth of Seguros Reservas’ capital base over the medium term, consistent with current risk-adjusted capitalization levels, and the successful integration of the company’s business strategy. Negative rating action could occur if the company’s risk-adjusted capitalization deteriorates to levels that no longer support the current rating. Negative rating action could also occur due to a sustained deterioration in the company’s operating performance metrics to levels that no longer support a strong assessment.

This press release refers to the ratings published on the AM Best website. For all other rating information related to the relevant publication and dissemination, including details of the office responsible for issuing each rating The qualifications of individuals mentioned in this press release are listed on the website Press release Author: AM Best. For more information on the use and limitations of credit rating opinions, see Best Credit Score GuideFor more information on the proper use of Best Credit Ratings, Best Performance Assessments, Best Initial Credit Assessments and AM Best news releases, visit Guidelines for the appropriate use of best ratings and reviews.

AM Best is a global credit rating agency, news and data provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, www.ambest.com.

Contact information

Olga Rubow, FRM
Senior Financial Analyst
+52 55 1102 2720, International calls 134
(email protected)

Alfonso Novello
Director of Advanced Analytics
+52 1102 2720, International calls 107
(email protected)

Christopher Sharkey
Deputy Director of Public Relations
+1 908 882 2310
(email protected)

Al Slavin
Senior Public Relations Strategist
+1 908 882 2318
(email protected)

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